You've collected the data and learned about your market and now you want to raise your fee. Ed shares some advice on when you might consider raising your fee.
Nicole Black is an attorney in Rochester, New York, is the Director of Business Development at MyCase, a web-based law practice management platform, and is the ABA-published author of “Cloud Computing for Lawyers” and the co-author of “Social Media for Lawyers.”
There’s no doubt about it--21st century lawyers are on the move and are embracing mobile devices more than ever. In fact, according to the ABA’s 2013 Legal Technology Survey Report, the vast majority of lawyers have now gone mobile, in one form or another.
Not surprisingly, smart phones lead the way, with 91 percent of lawyers reporting that they used smartphones in their law practices, up from 89 percent 2012. Tablet use also increased at an impressive rate, with nearly half of all lawyers surveyed reporting that they used tablets in their law practices. According to the survey results, 48 percent of lawyers now use tablets, up from 33 percent in 2012.
The reason lawyers are going mobile? Because it offers them flexibility and the ability to practice law and manage their law firms no matter where they happen to be. So, whether it’s using a tablet to pull up a case in court or accessing client files using their smart phone while on vacation, mobile computing is making it easier than ever for lawyers to practice law on the go, 24/7.
But is this necessarily a good thing? Especially with the recent release of Google Glass and the expected release of smart watches, which offer the prospect of virtually erasing the barriers created by devices and making people the new interface, as described in this recent GigaOM blog post: “Today many of these automatic interactions are dependent on a user’s mobile device, but we will be able to remove even that degree of separation between the individual and their home in the future. Through a combination of machine learning and a growing ecosystem of sensors placed within every day objects, we envision an interface that truly feels natural and intuitive to users no matter their level of technology literacy.”
It’s an interesting concept, but is it a healthy one--especially for lawyers, a group that has one of the highest rates of depression, substance abuse and suicide in the United States? Does 24/7 connectivity make sense for the mental health of most lawyers?
Clearly, for lawyers, the next stage of mobile technologies may present difficulties not previously experienced. And for many lawyers, it will be a delicate balance of meeting client expectations of constant availability while maintaining their sanity. In order to maintain this balance, lawyers will need to carefully choose new technologies for use in their practices with the end goal of reducing, not increasing, the non-stop barrage of information.
For example, one of the best ways to do this is to empower your clients by expanding their access to information, making it easy for them to obtain the information that they need about their case, no matter when they need it. In other words, by using tools such as online client portals that are accessible using any Internet-enabled device, you can ensure that your clients can get the information that they are seeking without having to contact you.
Like it or not, the world is changing and lawyers--and their clients--are more mobile than ever. And while this newfound mobility offers an array of benefits, it also creates new problems. Fortunately, selective use of emerging and mobile technologies can help to curb the influx of data and reduce the noise, making it easier than ever for lawyers to reap the benefits of a mobile law practice while simultaneously maintaining their sanity.
Today Ed takes on your questions! Based on a comment from a Facebook fan, he explores whether incentive-based compensation exists for lawyers.
Some law firms are late to the starting gate. Some firms continue to hang on to the "old ways" of running their practice. There are only a few alternative paths: Hang on with the old and wait for the world to catch up, or change as the world changes, making the tough decisions on a current basis.
In recent days, there have been several articles about large law firms cutting equity partners and staff in order to bring their financial affairs into focus. The reality is that they have found that the "eat what you kill" mentality works only so long before dissension and dissatisfaction sets in amongst the rank and file. Becoming more collaborative, cross selling the expertise of the firm and its individual members can create greater firm revenue. And paraphrasing former Pres. Kennedy, as the ocean rises, so do all the ships in the ocean.
In addition, the firms must identify their strengths and play to them. There are very few organizations that can be "all things to all people." With limited resources available, it is important to husband those resources and expend them in a focused manner for greatest benefit to the firm and its clients. Knowing who you are and what you want to be is essential to one's success.
The catalyst to change is often money. With a cushion from past successes, there is little motive to change. When a cushion narrows or evaporates entirely, and when collections become an issue because clients with their own financial problems fail to pay your legal billings, motivation to review your operations and make appropriate changes rises to the surface.
Jim Heiting, former president of the State Bar of California, commented on my article in LawBiz® Tips last week. He said, "I fully agree with your article about bar associations ... and the new push to create more unemployment and less opportunity for the solo and small practitioner. Why not develop a [Bar] program that assists solos and small practitioners to represent people for reduced fees to get experience, make money, provide services otherwise unavailable at that rate, etc. We have many, many who would like to make a modest living but can't/don't seem to do it. This would assist the needy in both arenas: client and attorney."
For my money, Jim Heiting has been the only California Bar leader who truly had members' (lawyers) AND the public's interests in mind. Others before and since Jim have seen the Bar as a regulatory agency for the public with little or no concern for members. Unfortunately, this is likewise the case across the country.
There are way too few leaders in the legal community, whether in the Bar or the law school, who understand The Business of Law® and are willing to focus on members’ (lawyers) needs. Instead, they focus on creating new licensure opportunities that will not truly help the intended market and will both weaken the value of the law degree and the economic well-being of members.
ABA Journal has just opened it's 100 best legal blog list.
This is an annual list, compiled on the basis of votes by readers, of the best blogs that lawyers should know about. If you enjoy my blawg, please follow this link to nominate it! Of course, you can also vote for other blog authors too, but please consider voting for mine, and let the editors know why you appreciate it!
Ed offers 5 ways to increase your law firm's revenue.
1. Emphasize collections.
2. Hire lateral lawyers to meet specific demands, a new practice area, a new need.
3. Leverage technology.
4. Create a cooperative compensation model that emphasizes the law firm as an institution.
5. Outsource functions that are better done by others. Delegate.
Ed shares some thoughts on electronic marketing and offers ideas on how traditional marketing can help you stand out in the crowd.
-You are more likely to be remembered, thus contacted, if you reach people on a personal level.
-Differentiating yourself will lead to increased :
--calls by clients and prospects
--calls from the media
-And most importantly: More money in the bank.
Today Ed talks about a basic sales mantra: "Meet People! Meet People! Meet People!" He shares how Five Cards and Three Feet can help do this.
Ed advises: keep track of your work, bill timely, and collect efficiently.
MyCase features my guest blog post suggesting that there is plenty of work for those lawyers willing to be realistic both in the nature of the clients they serve and the fees they charge.
While you're at their web site, check out their software. It has been reviewed by many and is well - regarded.
Ed advises: keep track of your work, bill timely, and collect efficiently.
Pop Quiz! When do you get rid of client documents? A) As soon as the case is over B) 2 years after case is closed C) Never. Watch this week's clip to hear Ed's answer...
As Ed continues "On the Road!" he explores ways attorneys can relate the cost of their services to clients, who might be demanding a reduction.
The real reason that clients refer their law firms is because they are satisfied with the service they receive. Good client service is responsible for about 46+% of all referrals.
Ed discusses managing a client's fee expectations.
In which category do you place yourself? These folks on a private farm have a sense of humor.
Ed reveals how to define your target market and the tactics necessary to reach it.
Developing your practice and business will always be a priority. This week, Ed shares tips about how networking can help you do this.
Learn important skills from Ed as he talks about how a lawyer can best allocate his time to handle current issues as well as prepare himself for the future.
Your law practice is a business. You should know how to run it like one.
At the TTT truck stop. One of the Country's finest. In Tucson.
Sometimes, you have to be explicit. Here, NO Motel is offered.
There's more than one way to see things!
Ed discusses alternative billing and how it relates to the elements of certainty and trust.
Seen in Arizona!
Ed discusses 8 steps that law practitioners can take to survive a recession.
Above all else, managing client expectations requires a commitment to communication. Tune in this week as Ed shares tips to make this easier for you.
Ed stresses the fact that knowledge of technology is now vital in order to be considered a competent lawyer.
Listen up, boomers! If you're a lawyer preparing for retirement, this week's vignette is for you.
Whether it's a recession or a depression we're in, several lessons have surfaced we cannot ignore. This week, Ed ponders what we can learn from this crisis to ensure we're on the right track for the future.
Ed discusses two ways lawyers can lower the cost to clients without discounting the legal service.
Ed examines the complexities of retainers and discusses their use within the legal profession.
How can you protect your law firm? Using Ed's Network Technology Guidelines as a simple way to prevent technological failures and keep you up to speed to make you more efficient.
Do you know how your clients would rate you?
During today's clip, Ed will share some indicators that might help you gauge the rapport between you and your clients.
Ed is often asked how much a law firm should allocate for advertising. The first thing he asks back is, "What is advertising?" Watch this week's clip to learn more.
One of the most stressful issues for lawyers and their administrators is how to manage old files that pile up. Today, Ed will share some advice on what can be done to save space - and money!
Ed speaks about the financing from a personal injury case.
Ed makes suggestions about what to consider when approaching the end of your lease.
I’ve talked about a lawyer having an estate plan. I’ve talked about creating an estate plan for your law practice; this is an idea first generated by Ellen Peck, retired judge of the California State Bar Trial Court. Now, there is another estate plan to prepare: Digital.
What are you going to do with all your passwords, all your email accounts, all your accounts in social media and all your other accounts that reside in the internet?
Your virtual life doesn’t end just because you die. And in some arenas, the material you have on the internet cannot be removed or taken down. You may even have money residing in some of the internet residences such as PayPal, on-line gambling accounts, etc. Be sure to appoint or designate someone to be responsible for dealing with these issues. Be sure to write down all the accounts and passwords. And be sure to contact such companies as LinkedIn, Facebook, Google, etc. to comply with their policies.
There is little or no case law to date about planning for digital assets after death, and certainly no precedent of which I’m aware on this. But, for just that reason, it’s time to think about these issues.
Ed discusses the factors that influence collection success.
Client selection: you have to get the right client.
You must understand the wants and the needs of the client.
You have to get confirmation of the arrangement between you and the client in writing.
And, check the client's credit.
For growth and expansion, there are two philosophies:
Trail your growth (conservative), or
Hire for the future (confident and assertive)
For troubled times, there are two philosophies:
Slow to hire
Quick to fire
Lawyers should do only two things:
Market for new business:
Only they know if they want to represent the prospect
Only they know if they’re competent to handle the matter
Only the lawyer is licensed by the state to practice
All else can and should be handled by others
Ed talks about creating a bond with the client to achieve client loyalty because your revenue is a perishable commodity.
Under current law, clients' trust accounts are protected under the IOLTA program. The FDIC provides unlimited insurance coverage.
However, unless extended by Congress, beginning January 1, 2013, such unlimited coverage will terminate and the new limit will once again be $250,000 per depositor. All funds held in such trust accounts as well as all funds held, personally, by the same client in the same institution will be considered in the $250,000 limit.
Be careful and review your bank's regulations and the funds you are holding for the benefit of your clients. Watch Congress for any "lame duck" laws on this and the FDIC and its responsive regulations. You may have to split clients' funds into two or more banking institutions in order to keep his/her money insured. And you may once again have the responsibility of checking on the financial soundness of the banking institution in which you maintain your clients' trust account.
Yesterday, I watched the Richard Gere film, Aribtrage. The film portrays a successful billionaire's moral decline as he attempts to save his failing company from his poor decisions. He "cooks" the company books by borrowing money that is not shown on the books as such in order to keep up appearances in order to complete a sale of the company, falsifies investors reports and otherwise plays "loose" with the truth. This is a man in trouble, but Gere continues to exude confidence in order to reach his goal.
Coincidentally, in today's Wall Street Journal, reporters once again discuss the Dewey & LeBoeuf LLP demise. Prosecutors are still questioning whether there was deception about the financial condition of the firm in the last few months. Were partners told the truth, were they given accurate financial reports, and were the firm obligations to pay down outstanding debt on behalf of terminated partners honored? And, were the transgressions that did occur a matter of a struggling business doing what it could to survive or a matter of criminal and/or civil fraud?
As a matter of "black letter law," it's clear that management (managing partner and management committee members) owe a fiduciary duty to others -- investors, lenders and partners. Did they breach this duty? How close to Arbitrage did the leaders of Dewey come?
Ed notes that poor client service is responsible for 63% of clients leaving their law firm.
In a recent display of enthusiasm, pizza shop owner, Scott Van Duzer, gave President Obama a bear hug when the President visited his shop on a Florida campaign tour. The visit and the ensuing bear hug provided quite a spectacle. After all, how could the secret service have permitted this? But, both the owner and the President seemed to enjoy the moment.
What impressed me more was the interview of the shop owner. He said, in response to a question about whether he feels that Obama has let the country down, “The bottom line is this: I own a small business. I take accountability for my business. I’m not looking to blame the government. And if people had the same mentality of taking care of their own businesses instead of looking to blame somebody when things are a little bad—just tightening things up and doing the best they can—I think we’d be better off that way, too. The whole world is not in a good place right now, and I’m not looking to blame someone. I think that’s the problem. We’re looking more so to blame him for our misfortunes.”
In other words, we’re not “entitled” to a particular way of life; we have to work to achieve our success; and we are accountable to ourselves ... neither the government nor anyone else has “done it to us.” Blaming someone else merely allows us to feel like a victim. We do have power and control over our own lives to a far greater degree than we admit.
By analogy, in a show the other day, Katie Courac talked to two teenagers who were bullied. Their common characteristic was that they refused to feel like a victim. They remained upright and confronted their attackers. Their stories provided an interesting perspective
Can we use help? Absolutely. Do we need rules of the road to assure that we have a level playing field? I believe so, but that's my bias. Should the government provide us with help? Before you answer this question, read the Time Magazine article by Jeremy Styron to understand how the government actually is in our daily lives, more than we know, more than we care to admit, providing us with material assistance just to get through our normal day's routine.
But, without the accountability to ourselves, without rules that apply to all, equally, we go nowhere. Thank you, Mr. Pizza Shop Owner, for putting entrepreneurship and small business in the proper perspective.
A laundry list of charges … be careful what you do in this taxicab!
LawBizForum.com contributor Linda Popky has 10 Tips for Promoting your Services, which Ed shares with you today
Oftentimes, especially in the family law environment (but also in other matters), our emotions control us to the point of ignoring reality. We seek to hurt the other party to the litigation through our attorneys. And, far too often, our attorneys are willing accomplices.
As the attorney, what control do you have over your client? Do you perceive yourself as the master of the ship, or the mouthpiece ... do you consider yourself the advocate for the best interests of your client or the alter ego of your client.
Marlo Van Oorschot, as an outstanding family lawyer in Southern California, this week puts another spin on this question, asking whether you're a surgeon or a gangster.
Electronic and computer technology enable lawyers to do more and better work in less time, but this creates a new service dynamic where clients continually demand to pay less for what they increasingly see as a commoditized service.
Law firms must meet client needs through greater technology efficiencies. Not only does this seem obvious, it is an element necessary to maintain competence as required by the rules of professional conduct.
More efficient law firms that reduce client legal costs should gain new business that enhances revenue. However, the ability to increase billings while becoming more efficient depends on changing the billing system to embrace alternative fee arrangements. With greater reliance on contingent, fixed, capped or value fees where time is not the relevant issue to determine the fee; service to the client is the key metric of value to the client, not billable hours.
Ed discusses the virtual office and the importance of face-to-face client contact.
“I am really tired, and want to retire.” But, retirement is out of reach for many lawyers after their homes and retirement plans took heavy hits over the last few years. “Business purgatory” is how one phrased it.
Delays in retirement are now common, with 38% in one survey saying their retirement will be at least 5 years later than expected. The income stream for many lawyers comes from their law practice. Selling, closing or merging the practice are options, but none are likely to provide the same income stream the lawyer is accustomed to receiving.
Unless the lawyer is willing to adjust one’s life style, he will remain in practice, working to build up the practice further in order to reap the rewards needed to fund retirement.
Ed advises how to prevent the loss of your largest client from being devastating.
Commentary about when and how a lawyer can represent both defense clients and plaintiff clients on the same issue.
Fact checking should be the backbone of every lawyer. I'm wondering why so many politicians, many of whom are lawyers, fail to fact check, or if they do fact check, fail to tell the full truth in their assertions.
Below is a list of "fact checkers" concerning recent assertions by politicians. Knowing that no political group is immune from "truth" distortions, we'll see what the Dem list looks like after their convention. We'll see if the distortions/lies are about the same issues.
Clint Eastwood says lawyers shouldn't be president in reference to Obama, but Romney is a lawyer as well. And as a profession, lawyers have made the greatest contribution to this country. It's truly sad when we as voters cannot rely as factual what is being said and then focus on the issues and values of each perspective. Can we get back to what is truly important?
I have been getting more calls from lawyers wanting to retire, wanting to sell their law practices. As a result, I started writing a new book. I just finished Life After Law: What Will You Do With the Rest of Your Life? It is being edited now and will be available for sale in October.
As a result, I've been giving a lot of thought to the definition of Goodwill, the primary asset a lawyer has to sell. And though it is not consistent with the accounting profession's definition, I have come upon a new definition that I believe is more meaningful to the average lawyer, whether buying or selling:
Goodwill can be defined as legacy ... it’s your legacy that you’re passing along to others ... It’s your reputation, your phone number, your system and way of doing business, all the intangible elements that made you successful and provides you, the selling lawyer, with what to sell ... The better is your reputation, the more value your law practice will have.
The ABA Journal has opened the nomination process for its annual Blawg 100, a list of the 100 best law-focused blogs on the Web.
The publication is requesting short submissions from people who have found that my blog, LawBiz Blog (www.lawbizblog.com) has provided valuable and timely information in my area, law practice management.
If you have enjoyed my blog postings over the past year (and prior years), I hope you will act as one of my “friends of court.” The process is quick and easy, and will take no more than a few moments of your time.
Simply click on the link below and fill out the short form. The deadline for submission is 7 p.m. ET on Friday, September 7th.
Thanks in advance for taking part!
The Blawg 100 Amici Nomination Form
What's the difference between a Successful Lawyer and a Challenged Lawyer? They've both got lessons to learn. Watch today as Ed teaches some of the most important ones.
Can one ever be rehabilitated from moral turpitude?
Remember Stephen Glass? He was the young journalist (in his 20’s) who lied and fabricated news stories. He was found out, disgraced and fired, never again to be hired as a journalist. A movie was made of his escapades, Shattered Glass. Fast forward through psychoanalysis, moving from New York to California, studying law, writing a successful book about journalism and “growing up.”
He went to law school, clerked for two federal judges, and interned in a law firm. He applied to the New York Bar, but withdrew his application when he learned that he would be rejected on moral turpitude grounds. He has now applied for admission to the California Bar. He worked for a California personal injury lawyer. Each of his employers has supported his application.
Despite his literary success, his scholastic achievement, and his apprenticeship in the law … and the passage of more than 10 years since his misdeeds, the State Bar of California opposes his admission to the Bar, as did New York. He pursued, however, and the matter is now before the California Supreme Court, after a 10 day confidential bar trial.
The real question is whether Glass is rehabilitated. If you defile one profession (journalism), are you forever tainted thereafter? Is our “penal” system meant for retribution or rehabilitation? We allow lawyers who have stolen from trust accounts because of alcoholism and drug addiction (diseases) to reenter the practice of law. Is there a different standard here? Not being privy to the trial testimony, one can only wonder why the Bar is so adamant in its position, given the support for Glass that is public.
We don’t have a really good definition of moral turpitude beyond platitudes; it’s on a case by case basis. And we don’t have a really good definition of rehabilitation; again, this is on a case by case basis. But, Glass’ experience in the legal community suggests that he has learned his lesson … a particularly important lesson when one is an officer of the court and the court relies on attorneys’ assertions representing clients.
Perhaps I am a bit cynical here. But, I wonder why the Bar is so harsh on Glass when we all can call out the names of lawyers who misquote case citations in briefs and otherwise misrepresent to the court in order to advance their position. Yet, these lawyers are seldom reprimanded, let alone disbarred. And in the field of sport, we know athletes “cheat” in order to better their chances of winning a race, often with impunity. Yet, here we have a person who has “paid a high price” for his cheating, has done what he could to rehabilitate himself, and yet is being denied the license of his new chosen profession.
Why is it that drunks and alcoholics can be considered rehabilitated even when they have stolen from their clients trust accounts or have been involved with terrible accidents, sometimes causing death to their victims? But, liars? Liars who have not caused anyone physical injury? With due respect to the Bar of which I am a member, Glass did not commit a heinous crime and should be given another chance.
Interested in making your firm more profitable? This video is for you.
Ed reveals the communication tools professionals can use to guarantee their work.
Ed speaks about positive and negative changes that affect the way lawyers practice law.
Ed weighs the costs and benefits of writing books, articles, blogs, etc.
Ed speaks about collections: lawyers effectively collecting on all that they bill.
Today, I realized that it is the 10 year anniversary of my riding up one of the most famous mountains in the world, Alpe d'Huez!
I rode a major mountain here in California earlier in the year, Mt. Figueroa about 1/2 hour north of Santa Barbara. It is the same mountain climb that many professional cyclists ride in the early months of the year to train for the Tour d'France and other major races. When I reached the top, the coaches at CTS Training (Chris Carmichael, then the coach of Lance Armstrong) assured me that this climb confirmed that I could climb any mountain in France. Well, in some disbelief, I made reservations the following week to go to France in July 2002. And I did climb several of the other major climbs in that year's Tour, as well.
It's now 10 years later; time has taken its toll. But, I did start training to climb Mt. Fig. again this year. Wish me luck, though I'll need more than that ...
What's in your bucket list? What are you doing to achieve your goals?
Ed Poll discusses how to develop and implement a strategic plan.
Are you billing appropriately? This week, Ed will offer handy tips that will help you collect what you billed to make sure that you're getting paid.
Justice should be free. However, the State of California has just cut the budget of its court system by more than $500 million! Litigants will be left to fend for themselves. One blogger suggests that private judges are not expensive when comparing the speed of justice in a private matter with the delays and increased costs of the public judicial system.
In the 1960s and 1970s, the State of California began changes to its pension system, which culminated in a major change in 1994. Judges elected or appointed before that year could with qualifications retire as early as age 60 at 75% of salary, but if they stayed on the bench after age 65 the percentage went down. Judges who assumed their jobs after 1994 got a further reduction. Many of these judges found it more advantageous to retire and hire themselves out as private judges. Thus began the two-tier system of justice, one for the rich who could afford to move quickly with a private judge, and the other for everyone else.
The recent budget cut further exacerbates the problem by giving incentives to even more people (who can afford it) to enter into the private judging world ... a boon for them and a catastrophe for the average citizen with an average matter who can't afford the added expenses of a private judge.
Our Constitution says everyone is entitled to right to counsel. In at least one instance, this applies to civil matters as well as criminal matters. Shouldn't this right also include that everyone is entitled to the right to be judged by a competent and objective individual, paid by the state? Private judging sounds too much like the old vigilante justice. Am I unfair when I ask whether these judges will be influenced by which lawyers use their services more? If this is a question raised in my mind, I wonder what the litigants might wonder .... And that is not how justice ought to be delivered or viewed.
As a postscript, there are already those who predict that the national system of health care under the now-validated Affordable Care Act will lead certain physicians to opt out of the system and care only for wealthy individuals who can afford them. Would such doctors refuse to see or treat a patient who could not demonstrate the required level of net worth?
Lincoln famously observed that a house divided against itself cannot stand. Ultimately the same can be said about a society divided against itself, between those who can pay and those who can’t.
Getting paid by the hour stresses us, according to Frank Partnoy. He says that "(i)nnovation doesn't occur in a year or a quarter---and certainly not an hour. So why measure work in too-brief increments?"
This is a novel rationale for moving toward the fixed or flat fee billing concept and away from hourly billing. During the 25 years of my law practice, I remember how stressed I was, always seeking to make sure that I had accounted for my time ... and correctly billing my clients. During the last 23 years of coaching and consulting .... and only flat/fixed fee billing, I'm focused on my clients' condition and how I can improve it, not on how much time it takes me to do so. As Partnoy says, "Clocks and calendars are not going to change -- so it is up to us to try to get off the clock, especially when we find ourselves watching it." (See Parnoy's "Wait: The Art and Science of Delay.")
The Problem with Bankruptcy Isn't Attorneys' Fees, It's Executive Incompetence - As Posted in Alan Weiss's Contrarian Consulting Blog.
Recently my article about Who Sets The Lawyer Fees was used as a guest blog by Alan Weiss. The blog discusses the recent Wall Street Journal article about the Justice Department's attempt to control fees that the bankruptcy lawyers seek, and the possibility that the U.S. Trustee Program may now be entering the fray.
In case you missed it, here's the link to Alan's blog: bit.ly/KoDDLx
In the Wall Street Journal, staff writer, Jacqueline Palank discusses the Justice Department’s attempt to control fees that bankruptcy lawyers seek. Creditors and employees may, at times, be a bit disgruntled by such fees. So, now, the U.S. Trustee Program appears to be entering the fray.
Before going further, it should be noted that i) any fee sought by an attorney must first be approved by the client going into bankruptcy; ii) the fee cannot be paid before a Bankruptcy Court Judge approves the fee request; iii) the legal fees most often are a pittance compared to the debts of the company and thus have little or no impact on either the creditors or the employees. In fact, the current proposal is limited to companies whose assets and debts exceed $50 million, hardly your "normal" bankruptcy.
The only reason for focusing on the legal fees is that this is a topic that makes good reading in the tabloids, including the WSJ. While the quoted hourly rate received by some attorneys seems high, it is insignificant in comparison to the compensation received by incompetent CEOs and others in the C-suite offices. Why don’t the tabloids focus on the cause of the bankruptcy? Why not focus on the compensation of the management team, which often is at astronomically higher multiples compared the lowest paid employees of the company? Why not seek redress against the management that is responsible for bringing the company to its knees? Although this focus may have more positive economic impact, it clearly is not sexy enough to sell many papers.
The U.S. Trustee is proposing, according to the writer, several new approaches to control lawyers’ fees, including:
• Though the lawyer applicant must disclose his/her hourly rate now, the Justice Department wants the lawyer to disclose the lowest, highest and average hourly rates the law firm charges in all its matters.
• The Department wants the lawyer applicant to create and disclose to the Court a budget for legal expenses. This budget would, necessarily, disclose to all involved, including the creditors who are adversaries of the bankrupt, the client’s planned legal strategy.
In the 1960s, the Supreme Court ruled that it was anti-competitive for bar associations to maintain a listing of suggested fees for different types of work. Such a listing, in particular, helped younger and newer lawyers set their fees at rates that were more in line with more senior lawyers. Not having such a list would compel lawyers to set their own fees, the theory being that lawyers would then be more competitive with one another to the consumers’ benefit. The Trustee by its first proposal ignores this. The existing disclosure already provides information that tends to be anti-competitive. Law firms can see what others are charging and price their own services accordingly, causing rates to slowly increase in lockstep over the years.
Intruding into the fees charged for practice areas, such as general business matters, estate planning, tax work, and other areas of work performed by the firms who also do bankruptcy work has no bearing on the special expertise of large company bankruptcy lawyers. No area of law other than bankruptcy requires such disclosure for court approval. Fees are left to be negotiated between attorney and client. Other than precedent, there is no reason disclosure should be made here either and the process should not be extended. “Transparency” is a bogus issue. There is no backroom conspiracy on how bankruptcy fees are charged. All the proceedings are public and must be approved by the Court before attorneys are paid anything.
Budgets are good. I recommend them to my attorney-clients with whom I consult. Budgeting is a process, however, between the client and the attorney. By requiring that bankruptcy budgets, which reveal legal strategy, be made public, the U.S. Trustee is saying that bankrupt companies have no rights. They have no right to advocacy; they have no right to develop a strategy that might affect creditors' claims; and they have no right of confidentiality. This is clearly contrary to the U.S. Constitution and our entire judicial system. While the bankrupts, and their inept management, may have proceeded down an economically unwise path, they still have rights to seek the best windup of affairs in their economic environment.
Don’t worry about the lawyers’ hourly rates once the bankruptcy petition is filed. They are regulated first, by the client, and second, by the Court. Who is watching the compensation of the management team before the company entered bankruptcy? Why are inept executives not punished with fines, or worse, for malfeasance and negligent management tactics? Why are they allowed to benefit so expansively at the expense of their workers? Why don’t the tabloids focus their sharp light there? Oh, I forgot, the tabloids need to sell papers, they are part of the industrial complex that both Presidents Washington and Eisenhower warned us about as they left office. Perhaps the fact that quite a few newspapers and newspaper chains (Tribune Co. and papers in Detroit, Denver, Minneapolis, Philadelphia and many other cities) have been mismanaged and had to file for bankruptcy has something to do with it, too.
FOR IMMEDIATE RELEASE
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Law Practice Management Expert Edward Poll to Host New Webinar this Week
Webinar Topic: How to Start Your Own Law Firm
VENICE, CA – Mar. 1, 2010 - Ed Poll, JD, MBA, CMC and principal of LawBiz® Management Company (www.lawbiz.com) and Edward Poll & Associates, Inc., will lead a webinar on “How to Start Your Own Law Firm” this Friday, March 5, 2010 at 9am PST. The webinar will be presented in collaboration with ExecSense Webinars and will available for download from their webpage (www.execsense.com) after the live event.
In “How to Start Your Own Law Firm”, Ed Poll will discuss the process of opening a private practice. The 60 minute event will cover the initial considerations attorneys should make when deciding whether or not to start a law firm, and will then walk through the various steps, including financial and operational matters, that lead up to a successful opening. This webinar, which is available on your computer, mobile phone and iPod, will also discuss specific “Dos and Don’ts,” and will include a FAQ at the end.
Host Edward Poll is a nationally-recognized expert in Law Practice Management. He has operated LawBiz® Management for 20 years and has helped lawyers across the across the country achieve greater profitability and success through his coaching, consultations, and other offerings such as books, and social media outreach.
According to Catharine Lloyd, head of speaker relations for ExecSense, “We were honored to have Mr. Poll lead a webinar on this topic. His work is highly regarded in the industry and the webinar is a great resource for lawyers.”
For complete information or to purchase this webinar, please visit www.execsense.com or call them at (415) 453-3003.
About Ed Poll, JD, MBA, CMC
Ed Poll, J.D., M.B.A., CMC, is a nationally recognized expert in law practice management. He helps attorneys and law firms increase their profitability consulting with them on issues of strategic planning, internal operations, business development, and financial matters. Poll brings his clients a solid background in both law and business. He has 25 years experience as a practicing attorney and has also served as CEO and COO for several manufacturing businesses. In 1990, he founded LawBiz® Management Company and is now focused on coaching, speaking, and training law firms.
Poll is the author of the just released book, Growing Your Law Practice in Tough Times (West-Thomson-Reuters 2010) and numerous other publications that have become the definitive works in the legal field, including: Law Firm Fees & Compensation: Value and Growth Dynamics (LawBiz© Management Co. 2008), Attorney & Law Firm Guide to The Business of Law: Planning and Operating for Survival and Growth, 2nd ed. (American Bar Assoc. 2003); The Profitable Law Office Handbook: Attorney’s Guide to Successful Business Planning (LawBiz® Management Co. 1996); Secrets of the Business of Law®: Successful Practices for Increasing Your Profits! (LawBiz® Management Co. 1998)
About ExecSense Webinars
ExecSense is the largest producer of executive webinars in the world, developing over 500 webinars a year led by hundreds of C-Level executives (CEO, CFO, CTO, CMO, CLO) and partners from 60% of the largest 200 law firms.
Depending on the webinar, it includes audio files and documents in PowerPoint, Word and/or Excel. ExecSense webinars can be viewed on your computer, mobile phone, iPod or printed and viewed offline. Over the course of a year, ExecSense is first-to-the-scene with webinars on breaking news, trends, and skills, often produced within hours of an important event occurring. ExecSense is a privately held company headquartered in San Rafael, California, founded in 2000.